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WORLD> America
WTO urges Brazil to reduce tariff to encourage trade
(Xinhua)
Updated: 2009-03-10 11:05

RIO DE JANEIRO -- The World Trade Organization (WTO) on Monday urged Brazil to reduce its tariff to boost trade amid the global economic crisis.

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The WTO said in its latest trade policy review that Brazil has managed to gradually modernize and streamline its trade regime since 2004, when the previous trade study was made.

The country saw an average annual growth of 4.5 percent from 2004 to 2007, and of 6 percent in the first half of 2008, which according to the WTO was due to a strong domestic demand and a favorable global economic environment.

However, the international financial crisis has presented new challenges to the country, and the WTO believes that Brazil must increase its efforts to boost trade and investments and provide greater predictability to foreign investment and trade.

The first step would be cutting on tariffs, which according to WTO jumped from 10.4 to 11.5 percent between 2004 and 2008, fueled by the surge in tariffs for non-agricultural products.

Bold steps to open up imports would also be beneficial, WTO stated. Brazil currently prohibits imports on virtually all consumer goods, including motor vehicles and certain grapes and grape juices for the production of wine.

WTO also believes Brazil should lower its interest rates, which were considered excessively high.

Additionally, the country also need to rein in the rising inflation rate, which increased remarkably in 2008 to an annual rate of 6.4 percent in October.

WTO also encourage more Brazilian trade cooperation with nations other than the members of the Southern Common Market (Mercosur).

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